Utah Solar Incentives, Tax Credits & Rebates (2024 Guide)
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Utah’s open skies and long sunlight hours make it a prime place for running your home on solar power. The Utah state government also provides multiple solar incentives to help homeowners save money while investing in clean energy.
Our team has spent numerous hours researching the best solar companies and the solar industry at large. This guide covers the best solar incentives in Utah to help you make the most of your investment.
What Are the Available Utah Solar Tax Credits and Rebates?
Utah offers some tax rebates and incentive programs to make solar more affordable and accessible. Here’s a look at what it’s offering in 2024:
Solar Easements and Rights
Solar easement laws protect your rights as a solar owner by having you and other involved parties, such as your neighbors or homeowners association (HOA), enter into an enforceable agreement. For example, if your neighbor has tall trees, an easement may prevent them from letting the trees grow above a height that could hinder your panels’ access to sunlight. These contracts are voluntary, but property owners often negotiate by offering some sort of compensation for entering the agreement.
A solar easement will not be terminated unless specified in the contract’s conditions. Any deed, will, or another instrument that creates a solar easement must include the following:
- A description of the affected properties.
- A spatial description of the solar skyspace.
- Any terms or conditions under which the solar easement is granted or may be terminated.
- Any provisions compensating the burdened party or, in the event of interference, the benefitted party.
- Any other provisions that are necessary to execute the agreement.
More resources: Utah Code 57-13
How Does the Federal Solar Tax Credit Work?
Utah residents also have access to the federal solar tax credit, called the Investment Tax Credit (ITC) for solar. This incentive lets you claim 30% of your total solar panel installation costs on your federal taxes. It was introduced as part of the Energy Policy Act of 2005 and was initially set to expire in 2007. However, Congress has extended the policy multiple times. It’s currently set to run until 2034, though the rate will begin to reduce in 2033.
Is Net Metering Available in Utah?
Utah has various net metering, or net excess generation (NEG), programs in partnership with local municipalities and utility companies. These programs provide energy bill credits based on how much excess energy your solar panels produce and send back into the power grid.
Your local net metering authority in Utah depends on your location and energy provider. Several Utah municipalities have voluntarily developed their own net metering programs. This includes the City of St. George and Murray City Power. One of the biggest net metering programs in the state comes from Rocky Mountain Power (part of PacifiCorp).
How Much Do Solar Panels Cost in Utah?
Installing a standard 6-kilowatt (kW) solar energy system in Utah costs an average of $13,250, according to EnergySage. This is lower than the national average cost of solar panels. Many solar companies charge by system wattage, which averages at $2.65 per watt. Based on these prices, applying the federal tax credit would save you $3,975.
The solar financing option you select impacts your total investment. We’ve outlined each option below to help you make the best decision for your budget.
- Cash purchase: An up-front cash payment offers the best long-term savings and return on investment (ROI). This option eliminates extra costs from interest rates, credit checks, and loan fees. It also grants you complete system ownership and qualifies you for solar incentives.
- Solar loan: A solar loan is the second most cost-effective payment option. A solar loan gives you full ownership and access to incentives while helping you to avoid a hefty up-front cost. You’ll make monthly payments over a fixed period, but you’ll ultimately pay more for your solar power system due to interest rates.
- Solar lease: If you don’t qualify for loans or can’t afford a large up-front cash payment, a solar lease is a good alternative. However, there are some downsides. A solar lease disqualifies you from incentives because the solar company remains the system owner. Also, the system won’t increase your home value as it would with full ownership since it’s rented. We recommend a solar lease if you primarily care about reducing energy bills and generating renewable energy.
- Power purchase agreement (PPA): A PPA involves only paying for your monthly energy use, similar to an electricity bill. Your contract outlines an expected rate lower than the average grid-tied energy costs. Many solar companies also include system maintenance and repairs with PPA contracts. However, you won’t own the system and are disqualified from using solar incentives.
Is Going Solar Worth it?
Solar panel systems are worth it in Utah, thanks to the state’s net metering laws and tax credits. The state also has ideal conditions to generate clean energy, including open skies and long sunlight hours.
These benefits help Utah residents stay within the average solar payback period, or the time it takes for solar panels to pay for themselves. The national average payback period is between six and 10 years. Solar panels also increase your home value by an average of $15,000.
Our Conclusion
Utah is a great place to go solar. Utah homeowners are protected by the state’s solar easements and rights and can access the federal tax credit and net metering programs to save money. This guide details Utah’s more significant solar incentives, but we recommend researching smaller city- and municipality-specific incentives on the Database of State Incentives for Renewables and Efficiency (DSIRE).
You can check out our guide to top-rated solar companies in Utah to begin planning your system. Use our tool below to connect with reputable solar companies in Utah.
FAQ About Solar Tax Incentives in Utah
Is solar a tax write-off?
Yes, solar is a tax write-off. Solar panels give you access to the federal solar tax credit, which allows you to reduce your tax liability. You can claim 30% of your solar installation costs on your federal taxes.
What happens after I pay off my solar panels?
Once you pay off your solar panels, you’ll still get a monthly electricity bill. However, your bill will be lower or might even be just a minimum monthly access charge depending on your energy consumption habits and whether you enter a net metering program.
How does the solar tax credit work in Utah?
The solar tax credit in Utah works by letting you claim 25% of your system cost on your state taxes, or $400, whichever is less.
Do solar panels increase home insurance?
Solar panels generally don’t increase homeowners insurance premiums. However, you will most likely need to raise your coverage limits to match the replacement costs of solar panels, which may slightly increase your premium.
Our Rating Methodology
We are committed to providing comprehensive and unbiased reviews to our readers. After over a thousand hours of research on solar companies, interviews with experts, and common customer needs, we’ve created a detailed rating system for solar providers based on six factors:
- Solar equipment, installation, and services (25%)
- Warranty and performance guarantees (25%)
- Brand reputation and certifications (15%)
- Financing options (15%)
- Experience (10%)
- Availability (10%)
Total scores are divided by 20 for a final 5-point rating scale.
To share feedback or ask a question about this article, send a note to our Reviews team at reviews@thisoldhousereviews.com.